In any data transmission system, it is desirable to maximize the ultimate signal-to-noise ratio (SNR). The primary noise source in a transmission carrier data transmission system that limits this SNR has been found to be phase instability in the local oscillators (LOs) both in the transmitter modulator and in the receiver demodulator. One technique for improving the ultimate SNR by minimizing the phase instability is to use more precisely controlled LOs. Such LOs use more complex circuitry and higher quality parts in their construction to produce a signal having a more stabilized phase characteristic. However, such LOs cost more due to the complex circuitry and higher quality components. It is, of course, desirable to minimize the cost of such a system, especially in consumer electronic equipment. Thus, a modulation technique is desirable which can improve the ultimate SNR in the presence of LO phase instability, without requiring the use of expensive higher quality circuitry and components.